Friday, March 7, 2025

Market Sentiment and Movement of Nifty 50 and Bank Nifty (March 7, 2025)

 



Market Sentiment Overview

The Indian equity market showcased a robust bullish undertone on March 6, 2025, as the Nifty 50 extended its upward trajectory with above-average volumes and a nearly 1% gain, closing at 22,545. 
The Bank Nifty mirrored this strength, rising 138 points to close at 48,628, marking its third consecutive session of gains. The broader market sentiment appears optimistic, supported by several technical and derivative indicators. The Nifty Put-Call Ratio (PCR) climbed to 1.14—the highest since February 4—indicating stronger bullish sentiment as traders favored selling Puts over Calls.
 Additionally, the India VIX remained subdued at 13.73, reflecting low volatility and a supportive environment for bulls.

 Buying interest at lower levels, a healthy breadth, and short-covering in 91 stocks further reinforced the positive mood. However, caution is warranted as certain patterns (e.g., Hanging Man-like candle on Nifty) hint at potential profit booking if key resistance levels are not breached convincingly.

Nifty 50 Movement and Key Insights

The Nifty 50’s rally past the 22,500 mark, coupled with its reclaiming of the 5-day and 10-day EMAs, signals growing bullish momentum. The index formed a bullish candle with a long lower shadow, indicating dip-buying, though its resemblance to a Hanging Man-like pattern suggests a need for confirmation of sustained strength. The next critical resistance zone lies between 22,750-22,800 (midline of Bollinger Bands), and a decisive close above this could pave the way for a move toward 23,000. Derivative data supports this outlook, with maximum Call open interest at 23,000 and significant Call writing at 22,800 and 23,100, marking these as potential hurdles. On the downside, 22,250 and 22,000 are key support levels in case of profit-taking, with the 22,500 Put strike showing the highest open interest (52.63 lakh contracts), reinforcing its role as a strong base. The RSI at 41.42, trending upward but still in the lower band, suggests room for further upside if momentum accelerates.

Bank Nifty Movement and Key Insights

The Bank Nifty exhibited resilience, sustaining its higher highs-higher lows formation and gaining for the third straight session. Closing at 48,628, the index is approaching the critical 49,100 level (midline of Bollinger Bands), which will be pivotal for a stronger bullish breakout. Options data highlights 50,000 as the key resistance, with maximum Call open interest concentrated there (13.95 lakh contracts), while 48,000 holds firm as a support level with the highest Put open interest (12.32 lakh contracts). The RSI at 43.87, trending higher since Tuesday, indicates improving momentum, though it remains in the lower band, suggesting the rally has potential to extend if buying pressure persists. Fibonacci retracement levels further outline resistance at 49,402 and 50,375, with support at 47,881 and 46,078.

Important Levels for Bank Nifty Trading Tomorrow (March 7, 2025)

For traders eyeing the Bank Nifty on March 7, the following levels are crucial based on pivot points, Fibonacci retracement, and options data:Resistance Levels:48,795 (Immediate Pivot Resistance): A break above this could trigger short-covering toward higher levels.49,100 (Bollinger Bands Midline): A decisive close above this is key for bullish confirmation, targeting 49,402.49,402 (Fibonacci Resistance):

 Next significant hurdle if momentum sustains.50,000 (Major Call OI): Psychological and derivative resistance; a breakout here could signal a sharp rally.
Support Levels:48,383 (Immediate Pivot Support): First line of defense against profit booking.48,000 (Max Put OI): Strong support zone backed by high open interest.47,881 (Fibonacci Support): Deeper support if selling pressure intensifies.47,000 (Secondary Put OI): Critical base in case of a broader correction.

Trading Strategy 

Suggestions Bullish Scenario:

 If Bank Nifty sustains above 48,795 early in the session, consider long positions targeting 49,100 and 49,402, with a stop-loss below 48,383. A breakout above 49,100 could offer a high-probability move toward 50,000.

Bearish Scenario: 

Should profit booking emerge and the index slips below 48,383, short positions could be initiated with a target of 48,000 or 47,881, placing a stop-loss above 48,795.Range-Bound Play: If the index oscillates between 48,383 and 48,795, traders can adopt a range-trading strategy, buying near support and selling near resistance.

Conclusion

The market sentiment leans bullish for both Nifty 50 and Bank Nifty as of March 6, with technicals and derivatives aligning for potential upside. However, traders should remain vigilant around key resistance zones (22,750-22,800 for Nifty; 49,100-50,000 for Bank Nifty) and monitor for signs of reversal or profit booking. For Bank Nifty specifically, 49,100 remains the level to watch for a breakout, while 48,000 offers a solid safety net on the downside. Volume trends, RSI momentum, and options activity will be critical drivers for tomorrow’s session.

Anish Jagdish Parashar 
Indirect tax india research 


Disclaimer Content above are personal views of author.For investment and trading purposes consult your financial advisor.

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